SAN FRANCISCO (AP) -- Government regulators are
sharing some alarming information about Facebook: They believe the
online social network has often misled its more than 800 million users
about the sanctity of their personal information.
unflattering portrait of Facebook's privacy practices emerged Tuesday in
a Federal Trade Commission complaint alleging that Facebook exposed
details about users' lives without getting legally required consent. In
some cases, the FTC charged, Facebook allowed potentially sensitive
details to be passed along to advertisers and software developers
prowling for customers.
To avoid further legal wrangling,
Facebook agreed to submit to government audits of its privacy practices
every other year for the next two decades. The company committed to
getting explicit approval from its users -- a process known as "opting
in" -- before changing their privacy controls.
The FTC's truce
with Facebook, along with previous settlements with Google and Twitter,
is helping to establish more ground rules for online privacy
expectations even as Internet companies regularly vacuum up insights
about their audiences in an effort to sell more advertising.
Facebook didn't acknowledge any wrongdoing in the legal papers it
signed with the FTC, Facebook co-founder and CEO Mark Zuckerberg was
more contrite in a blog post Tuesday.
"I'm the first to admit
that we've made a bunch of mistakes," Zuckerberg wrote. "In particular, I
think that a small number of high-profile mistakes ... have often
overshadowed much of the good work we've done."
overcome its missteps in the past to emerge as the world's largest
social network and one of the Internet's most influential companies
since Zuckerberg created the website in his Harvard University dorm room
No website has been as successful as Facebook at
getting people to voluntarily share intimate details about themselves.
Zuckerberg has emerged as the Internet's chief evangelist for sharing,
partly because he believes it can help make the world a better place by
making it easier for people to stay connected with the things and people
that they care about.
Facebook also is trying to make money by
mining the personal information that it collects to help customize ads
and aim the messages at people most likely to buy the products and
services being promoted.
That strategy has been working well as
Facebook prepares to sell its stock in an initial public offering that's
expected next year.
The company's revenue this year is expected
to approach $4.3 billion, according to research firm eMarketer, up from
$777 million in 2009. The rapid growth is expected to make Facebook the
biggest Internet IPO in history, topping Google's stock market debut in
The FTC's 19-page complaint casts a glaring spotlight on
how Facebook has approached its users' rights to privacy at a time that
it is facing tougher competition from Internet search leader Google
Inc., which has attracted more than 40 million users to a social service
called Plus just five months after its debut.
Google tried to
lure people away from Facebook with a system that made it easier to
guard their personal information. Facebook has responded by introducing
more granular privacy settings.
The FTC cracked down on Google
eight months ago for alleged privacy abuses that occurred last year when
the company attempted to plant a social network called Buzz within its
widely used Gmail service. Like Facebook, Google agreed to improve its
privacy practices and submit to external audits for the next 20 years.
the online short-messaging service, also struck a settlement with the
FTC in June 2010 to resolve charges that it didn't do enough to protect
users' accounts from computer hackers.
Much of the FTC's
complaint against Facebook centers on a series of changes that the
company made to its privacy controls in late 2009. The revisions
automatically shared information and pictures about Facebook users, even
if they previously programmed their privacy settings to shield the
content. Among other things, people's profile pictures, lists of online
friends and political views were suddenly available for the world to
see, the FTC alleged.
The complaint also charges that Facebook
shared its users' personal information with third-party advertisers from
September 2008 through May 2010 despite several public assurances from
company officials that it wasn't passing the data along for marketing
Facebook believes that happened only in limited
instances, generally when users clicked on ads that appeared on their
personal profile pages. Most of Facebook's users click on ads when they
are on their "Wall" -- a section that highlights their friends' posts --
or while visiting someone else's profile page.
The FTC also alleged that Facebook displayed personal photos even after users deleted them from their accounts.
Facebook's agreement with the FTC requires the company to obey privacy laws or face
fines of $16,000 per day for each violation.
innovation does not have to come at the expense of consumer privacy,"
FTC Chairman Jon Leibowitz. "The FTC action will ensure it will not."
FTC's commissioners unanimously approved the agreement with Facebook.
The FTC is accepting public comments through Dec. 30 before deciding
whether to finalize the settlement.
commitment to privacy wasn't enough to satisfy Jeff Chester, executive
director for the Center for Digital Democracy, one of the privacy
watchdog groups that prodded the FTC investigation. In a statement,
Chester called on Zuckerberg and Facebook's board of directors to resign
so that the company could hire more trustworthy replacements.
misled consumers and should pay a price beyond a 20-year agreement to
conduct their business practices in a more above-board fashion," Chester
Facebook sought to downplay the gravity of the FTC's
allegations, maintaining that it had already addressed most of the
privacy complaints. Zuckerberg said the website has added more than 20
new privacy features in the past 18 months.
To underscore its
commitment, Facebook has created two new executive positions -- Michael
Richter as chief privacy officer of products and Erin Egan as chief
privacy officer of policy.
"This means we're making a clear and
formal long-term commitment to do the things we've always tried to do
and planned to keep doing -- giving you tools to control who can see
your information and then making sure only those people you intend can
see it," Zuckerberg wrote in his blog post.
The FTC's complaint: http://1.usa.gov/uUrr4z
Mark Zuckerberg's blog post: http://on.fb.me/vkTdhV